Determination of the precise total cost of ownership (TCO) related to operating fleets has always been difficult. According to Johan van Niekerk, Fleet Solutions Consultant at FleetDomain – an Argility Technology Group company, this is due to various issues including lack of information due to not capturing a holistic view of all vehicle expenses from a central source.
“As South Africa moved out of the full impact of the pandemic, significant cost increases were experienced with regards to vehicle ownership – regardless of whether they related to individual citizens or businesses managing fleets. Inflation of vehicle purchase prices, maintenance, tyres and fuel over the past three years have combined to contribute to a staggering 20% to 30% cost increase for an average passenger and light commercial vehicle,” says Van Niekerk.
According to Van Niekerk, the only way to tackle this spiralling TCO escalation is to implement a fleet management information system (FMIS) as supplied and supported by FleetDomain. “To improve the costs and risks associated with fleet operations, businesses must take an all-inclusive management approach and ensure they have the information necessary regarding accidents, fines, management and personnel.”
Van Niekerk reveals some cost comparison models in the attached table:
Comparing a selection of vehicles purchased in 2019 and 2022
“Examination of the numbers in the attached table shows that expenses must be managed, controlled and reduced in line with, or below, inflation. Unmanaged vehicle expenses can end up incurring 10% to 23% greater costs than necessary. This can be explained when one considers that fixed costs are managed by accounts, and variable costs are managed, in most instances, by fleet operations. The latter can either capture all expenses, or they can implement the use of a maintenance or fuel card. In some instances, maintenance, tyres and fuel are all managed on one card,” he explains.
Van Niekerk says companies often add a GPS/tracking device to enable them to locate assets and monitor driver behaviour. By scrutinising GPS/tracking kilometre usage and comparing it with card kilometre usage, the actual usage per month can be determined.
“It is important to understand that a GPS/tracking device is not a fleet management system. Change in driver behaviour and meaningful savings will not be achieved without relevant information regarding speeding, harsh braking, acceleration, excessive idling and all the other actions performed by drivers that cause increased maintenance, tyre and excessive fuel usage. All of the foregoing can only be achieved with an FMIS.”
Van Niekerk says in post-COVID South Africa, vehicle price increases of between 27% and 32% – dependent on models and country of origin – have contributed significantly to TCO. “However, resale values of some models improved due to the shortage of new vehicles. Maintenance and tyre replacement come in at 17% to 21% of TCO, with the actual percentage increase being manufacturer/supplier dependent. Fuel has been identified as the most changed value, having been measured as a percentage of the overall at 96% to 145% (depending on mileage and application) in the TCO stakes.”
FleetDomain’s FMIS can integrate with finance institutions, maintenance, tyre, fuel and GPS/tracking service providers placing all costs on one platform. “The FleetDomain online FMIS can assist companies to receive and analyse all vehicle-related expenses and in turn aid informed decision-making regarding model selection, driver behaviour, safety and risk management,” he concludes.
Source: IT Web
Growing market for Selftrack – FleetDomain partnership’s one-stop-shop for fleet management.
South African fleet owners, many of whom were still using spreadsheets to track assets and manage costs at the beginning of this year, are fast turning to automated tracking and advanced fleet management solutions to optimise fleet operations and cut costs.
This is according to Jai Kalyan, MD of FleetDomain – a member of the Argility Technology Group (ATG), and Pieter Coetzee, MD of asset management and telematics solutions specialist company, Selftrack. FleetDomain has integrated Selftrack’s tracking solution into its fleet management information system (FMIS), enabling Selftrack to resell FleetDomain as part of a bundled solution.
The partnership gives fleet owners a one-stop shop for efficient fleet management. FleetDomain’s Web-based FMIS allows fleet owners to track and manage factors such as driver behaviour, costs, fuel purchases, fines, licences and repairs.
Kalyan says the lockdown has driven a surge of interest in smarter fleet management, partly due to a need to work remotely, and also due to a need to do more with less. “We’ve seen huge growth in interest in the FleetDomain system over the last few months,” he says. “Fleet owners are realising that with smart, digital systems, they are able to track trends in real-time and more accurately determine the total cost of ownership on each vehicle. Thanks to the dashboarding we have added to the system, fleet owners can also load all KPIs to one sheet and see how the business is doing against budget, fuel spend and maintenance trends.”
Coetzee says the lockdown and its economic impact have catalysed a shift in how fleet owners manage their vehicles. “Fleet owners are looking to cut costs and optimise profits, so they are adopting frontline technologies to enhance fleet visibility and control, and drive up savings and productivity,” he says. “At Selftrack, we have seen a significant increase in interest in the bundled Selftrack – FleetDomain offering as fleet owners look for a scientific way to manage their fleet.”
He says the surge in interest is coming primarily due to word of mouth references from customers already achieving savings of up to 40% on fuel consumption, curbing misuse of vehicles, and optimising vehicle management to get the most out of their assets.
“In many cases, we find new clients previously had to manually collect data and had a complete disarray of information, so it was very difficult for them to keep their finger on the pulse,” says Coetzee. “Once they can automatically track fleet usage, calculate costs and monitor fuel systems, they stop misuse and fuel theft immediately, and other improvements follow. The logistics manager starts looking better in front of management, and over the longer term, the total cost of ownership drops. Within six to 12 months, the system pays for itself.
“As a GPS tracking specialist, we have integrated FleetDomain into our systems and added it as a service billed monthly per vehicle. This means it becomes affordable for even smaller, up-and-coming fleet owners,” he says.
Letitia Hulbert, Operations executive at FleetDomain, says FleetDomain has become a market leader thanks to its ability to consolidate data and allow fleet owners to identify trends in real-time: “When the data is on a variety of spreadsheets, it becomes very difficult for organisations to be proactive, see where they are overspending, and identify driver behaviour that could be adding to costs,” she says.
Driver behaviour is just one of the factors that has a significant impact on costs, Hulbert says. “Revving the vehicle, accelerating too quickly, and harsh braking all affect fuel and maintenance costs. Once you can identify driver behavioural issues, you are in a much better position to correct that behaviour.” She notes that by enabling improved operational efficiency, simplified administration and enhanced visibility over the entire fleet, FleetDomain is a significant value add for Selftrack customers.
Source: IT Web
